Independence Realty Trust, Inc.

keypad. If you'd like to withdraw your questions, press star followed by the number one. As a reminder, today's call is being recorded. I will now hand today's call over to Stephanie Crews and Kelly. Please go ahead.

Good morning and thank you for joining us to review Independence Realty Trust first quarter 2025 financial results. On the call with me today are Scott Schaefer, Chief Executive Officer, Jim Sebra, President and CFO, and Janice Richards, Executive Vice President of Operations. Today's call is being webcast in the Investors section of our website, irtliving.com, and a replay will be available via webcast and telephonically beginning at approximately 12 noon today, Eastern Time. Before I turn the call over to Scott, I'd like to remind everyone that there may be forward-looking statements made on this call. These forward-looking statements reflect IRT's current views with respect to future events and financial performance. Actual results could differ substantially and materially from what IRT has projected. Such statements are made in good faith pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to IRT's press release, supplemental information, and filing for the SEC for factors that could affect the accuracy of our expectations or cause our future results to differ materially from those expectations. Participants may discuss non-GAAP financial measures during this call. Copy of IRT's earnings press release and supplemental information containing financial information, other statistical information, and reconciliations of non-GAAP financial measures to most direct comparable GAAP financial measures is attached to IRT's current report on the Form 8K available in the SEC filings section of IRT's Investors website. IRT does not undertake to update forward-looking statements on this call or with respect to matters described herein. except as may be required by law. With that, it's my pleasure to turn the call over to Scott Schaffer.

Thanks, Stephanie, and thank you all for joining us this morning. I'm happy to report that 2025 is unfolding largely as we anticipated, despite the macroeconomic uncertainties that have emerged since our last call. We are on track to achieve both our full year same store NOI and core FFO per share guidance. Our communities are well located in areas with strong population and employment growth, and will continue to outperform even during periods of economic uncertainty. First quarter results were solid. We delivered 2.7% same store NOI growth driven by 100 basis point increase in average occupancy year over year, as well as an increase in our average effective rent since the first quarter of last year. Value add renovations also contributed to our same store results. During the quarter, we completed 275 units and achieved a weighted average return on investment of 16.2%. We now have 28 communities with over 4600 units and our ongoing value add program and expect to complete between 2500 and 3000 units this year at our targeted. We continue to execute on our long term investment strategy during the quarter. We sold our final asset in Birmingham, Alabama for 111M dollars, which completed our exit from that market and we expand scale in Indianapolis. by purchasing a 280-unit community for $59.5 million at a 5.6% economic cap rate. We also entered into a new joint venture investment that will develop 324 units in Charleston, South Carolina. We are under contract on two additional communities with a combined purchase price of approximately $155 million. One asset located in Orlando was developed in 2019 as adjacent to an existing IRT-owned community and will provide many operating synergies. The second property is a newly developed community in Colorado Springs that is in lease-up. These investments will provide an economic cap rate in the high fives during year one. Beyond these pending transactions, our acquisition pipeline remains strong. As Jim will discuss, we have ample liquidity to deploy into these and other accretive investments. Regarding our markets, apartment fund levels will improve across the portfolio during this year, as prior deliveries are absorbed and new supply deliveries decrease sharply from recent peak levels. In 2024, approximately 79,000 new apartment units were delivered across our submarkets, representing 6.1% of existing supply. We expect 32,000 new deliveries in 2025 and only 24,000 units in 2026, representing 2% and 1.5% of existing supply respectively. These deliveries equate to annual decrease of 60% in 2025 and an additional 24% in 2026. We expect our Sunbelt markets will benefit the most from expected declines in new apartment deliveries this year. Demand for our portfolio of high-quality, largely Class B communities has proven to be resilient over the years, even during challenging economic times, as demonstrated by our stable occupancy rates and positive blended rent growth. During 2024, nationwide new deliveries of multifamily units exceeded absorption, resulting in a negative net absorption of 21%. In 2025, while the national apartment market is expected to see positive net absorption of 1.5%, our submarkets are forecasted to rebound strongly and enjoy positive net absorption of 8.5%, as increases in population outpace new supply. Longer term, IRT submarkets are forecast to see population growth of seven people for every one newly delivered apartment over the next three years. Additionally, homeownership affordability factors that include elevated mortgage rates and home prices continue to favor renting. Across our top 10 markets, average home ownership costs are 94% higher than IRT's monthly rent. Importantly, IRT's average resident rent to income ratio is stable at approximately 21%, indicating our residents are on solid financial footing. As I mentioned earlier, we are sensitive to the macroeconomic uncertainties that have emerged since our last call. However, we believe supply and demand fundamentals in our markets will continue to be the dominant influence on our operations. Based on our outlook for continued strong demand and significant decline to new supply, our 2025 plan continues to assume ongoing rental rate gains without sacrificing occupancy. First quarter results have demonstrated this to date, and we expect this dynamic to accelerate as we advance into 2026. Before handing the call over to Jim, I want to thank the IRT team for their continued hard work and dedication to delivering exceptional service to our residents. I'll now turn the call over to Jim.

Thanks, Scott, and good morning, everyone. Core FFO per share of 27 cents in the first quarter of 2025 was flat as compared to the prior year period, reflecting the impact of the final stages of our portfolio optimization and deleveraging strategy that was completed last year. Same-store NOI grew 2.7% in the quarter, comprised of a 2.3% increase in same-store revenue and a 1.6% increase in operating expenses over the prior year. As we forecasted, same store revenue growth was driven by a 100 basis point increase in average occupancy, a 90 basis point increase in average effective monthly rents, and 50 basis points of lower bid debt compared to the prior year. Same store operating expense growth in the quarter reflected a 2.9% increase in controllable expenses driven by higher contract services and advertising. These increases were partially offset by a 30 basis point decrease in non-controllable expenses. Overall, lower repair and maintenance costs, turn costs, and property insurance costs kept total expense growth below inflation levels during Q1 of 2025. Regarding recent leasing trends, the year is unfolding as expected, broadly speaking. For our like-term leases during Q1, our blended rental rate growth was up 10 basis points, with new lease rates down 4.6%, and renewal rents up 4.8%. Please keep in mind that during Q1 2025, only 12% of our leases expires. For Q1 2025, our resident retention rate was 59.5% and our rate of resident renewals was 68.6%. Regarding investment activity, during the first quarter, we sold a property in Birmingham, Alabama for $111 million, representing a 5.6% economic cap rate. And we recognize that $55 million tax gain As Scott mentioned, we acquired a community in Indianapolis for $59.5 million, which was a 5.6% economic cap rate, and the property is a candidate for our Value Add program. We also entered into a new joint venture to develop a 324-unit community in Charleston, South Carolina, which is targeted for delivery in the second quarter of 2027 at an anticipated yield-on cost of 6.8%. Our balance sheet is strong with low risk. We ended the quarter with a net debt to adjusted EBITDA ratio of 6.3 times, which is higher than our fourth quarter 2024 ratio due to seasonally lower Q1 EBITDA associated with seasonally higher operating expenses. We remain on track to achieve a mid-five net debt to adjusted EBITDA ratio by year end 2025. Including principal amortization, only 17% of our total debt matures between now and year end 2027. which is one of the lowest among public multifamily peers. In March, we entered into a new one-year $100 million SOFR swap, resulting in 100% of our debt being fixed and or hedged. Lastly, we have nearly $750 million of liquidity to fund accretive investments. With respect to our financial outlook for 2025, we are certainly aware of the potential for an economic slowdown. However, in our submarkets, we see pricing power in front of us and accordingly are not making any changes to our guidance. Scott, back to you.

Thanks, Jim. We are off to a solid start to the year and continue to believe that we are at the beginning of a multi-year period of improving fundamentals and growth. Because of our portfolio's market concentrations, waning supply pressures, and strong balance sheet, we expect our portfolio and platform will continue to outperform in 2025 and enter 2026 with solid earnings momentum and growth opportunities. We thank you for joining us today and look forward to seeing many of you at the Wells Fargo conference next week and the Navy conference in June. Operator, you can now listen to call for questions.

At this time, if you would like to ask a question, press star followed by the number one on your telephone keypad. If your question has been answered and you would like to remove yourself from the queue, press star followed by the number one. Your first question is from the line of Brad Heffern with RBC.

Hey, morning, everyone. Thanks. Can you walk through the leaking spreads for the first quarter? Obviously below guidance. Why was that? And does it change your view at all on the original spread guidance for the full year?

Sure. Thanks, Brad. You know, I'll obviously give you some commentary. You know, Janice or Scott obviously jump in. You know, leasing spreads, new leases were down 4.6% in the first quarter. Renewals are up 4.8%. You know, obviously, in terms of the trajectory throughout the year, as well as the four-year guide, you know, obviously, there's a lot of facets to the question. You know, I think when you compare that trajectory from Q4 to Q1 for us, you compare it versus our peers. You know, I just want to remind everybody that we have predominantly a B-class portfolio, and as a result, didn't really experience the same level of decline in rental rates as some of our peers did because they're mainly a Class A portfolio and compete more with the new supply that was delivered. Secondly, the trends that we're seeing month to month so far this year continue to be very positive. We continue to see January was better. February is better than January. That continues all the way through April. So we're quite excited about that kind of development of the waning pressure from new supply that we kind of highlighted earlier this year and really kind of seeing that improving rental rate growth in the back half of the year.

Okay, got it. And then, on the tenant level, have you seen any evidence yet of stress from the tariffs, macro uncertainty, et cetera?

Good morning. Overall, we've not felt any effects from the tariffs and or from deportations. I think it's a little early, but we are watching it extremely closely, and we have, great faith in our teams that we will be able to offset and continue to outperform as we've done in the past with economic uncertainty.

And just to add on to that, you know, in the first quarter of this year, our bad debt was roughly down 50 basis points versus Q1 of last year. So a lot of the initiatives we took in place to kind of deal with fraud have working and we haven't seen a related kind of uptick because of hardships or anything else. So we're, you know, we're seeing the good progression that we anticipated.

Your next question is from the line of Austin Warschmidt with KeyBank Capital Markets.

Great, thanks. Good morning, everybody. Jim, you mentioned month-to-month improvement in market rents this year. Is that starting to lead to acceleration in leasing spreads as we get into the second quarter, or if you compare kind of the trade-outs for like-term leases?

Yeah, the comment was more directed at the improvement in the trade-outs that we're seeing. You know, the trade-outs in February were better than January. March were better than February. And April is better than March. Obviously, we're getting away from talking about specific numbers, you know, month to month. But just, you know, kind of general trajectory is that it is improving at the pace that we anticipated. And as we mentioned earlier, you know, we really do see the pressure from new supply waning in the back half of the year. And that's really going to help accelerate trade-outs.

further more or more more accelerated the back after the year that's helpful and then can you just speak to maybe how trends are playing out on the ground from a traffic and conversion expected uh perspective versus prior years and just give us a sense of of when you release for great growth you know might turn positive just wondering if there's kind of any change in that expectation

Yeah, you know, from the standpoint of the leasing traffic on the ground, you know, here in May and so far for kind of April as well as March, you know, the demand is 25% versus the same time period last year. So the demand is increasing significantly. And I would generally say that, you know, the conversion is still kind of relatively the same as last year. So we're beginning to see kind of upward trajectory to obviously that lease rate growth and then obviously occupancy. I don't know, Janet, do you want to kind of add any additional comments?

Yeah, I think seasonality is playing out as anticipated and we're seeing some great demands in the market that we're ready to capitalize on.

Your next question is from the line of John Kim with BMO Capital Markets.

I just wanted to clarify on what you're seeing in April and May. You discussed, Jim, that price and power is in front of you, and I just want to make sure that commentary was based on what you're seeing on new lease rates and renewals on what you're finding in April and May so far.

Yeah, the commentary is on obviously blended rental rates. And yes, obviously both that trajectory is developing positively for both new leases and the overall blended rates.

Do you anticipate starting or sourcing more development opportunities this year? You mentioned the one in Charleston will be developed at 6.8% yield. It seems like there could be some more opportunities at attractive yield spreads to acquisitions. But I'm wondering what you're seeing on the ground and if you anticipate putting more capital in developments.

Hey, John. This is Scott. We're seeing a lot of opportunities. You know, we're very cognizant of our cost of capital. And, you know, we have over, you know, since we started that program, you know, limited our exposure to the development just as a management of the balance sheet risk or the risk to the balance sheet. But we are seeing opportunities. The one in Charleston was particularly attractive to us because we have some, a couple of assets in Charleston and have been looking to grow there, but have found it difficult to buy accretively. So this was a way to, you know, invest in an asset, giving us the option to buy it when it's completed, hopefully at a good return.

Your next question is from the line of Eric Wolf with Citigroup.

Hey, thanks. Can you just talk about the decision to raise capital on the ATM and sort of how you're thinking about the spread between your cost of capital and where you can acquire assets today and what that opportunity set looks like?

Sure. Yeah, you know, obviously when we did the September equity raise last year and ATM raise in fourth quarter and then some additional ATM in the first quarter, you know, the break-even call it economic cap rate for the deal, for it to be accretive from an earnings standpoint is in the kind of 5.4% range. And as we've been able to demonstrate, you know, we're able to, you know, purchase assets with a year one, you know, economic cap rate of five, six or north. So the deals we're doing are created from an earning standpoint. So for us, you know, to continue to raise capital when the market's kind of given us the go signal makes a lot of sense, especially when we believe we can put it to work. The two deals, and you kind of heard us talk about it in our prepared remarks, the two deals that are under contract, the one in Orlando and the new build in Colorado Springs, you know, that blended economic cap rate is, you know, high fives, roughly 5.8% year one.

That's helpful. And then let me just follow up on the sort of blended spreads. It looks like the sort of all-in blended spreads are a bit lower than your like-term spreads. And I think you mentioned before that the reason is you're trying to move away from short-term leases and extend duration on those leases. Can you just talk about sort of when you began that process and why you began that process and how long you think that will impact your overall rent growth.

Yeah, so we started that process in the mid part of last year. And as you can imagine, it takes almost a year for us to fully kind of go through the process. So we would expect that transition from less short-term leases and more long-term leases to be almost done by the middle part of this year. Obviously, it's always market-driven. When a prospect comes in, they have the option to choose at whatever the rates are for a three-month lease up to a 12- or 13-month lease. And that is a little bit out of our control, but we certainly kind of look at setting the premiums to go from a longer-term lease to a shorter-term lease to kind of influence the expiration curve so that the expirations are happening in the period of time where you have the highest leasing traffic.

Your next question is from the line of Amy Probent with UBS.

Hi, thanks. So you're passing the last of the easy comps on occupancy, and the occupancy comps are then normalized starting in the next quarter. So I'm just wondering how we should be thinking about the cadence of same-star revenue from here, and if there are any other pieces outside of the rent spreads themselves that could be leading to some lumpiness in same-star revenue through the year.

Yeah, obviously, you're absolutely right. You know, occupancy was a big lift here in the first quarter relative to the first quarter of last year. You know, second quarter, third quarter, and fourth quarter, you know, the revenue growth has really kind of got to come from both the rental rate growth as well as the reduction in bad debt that we forecast throughout the year. I would say, generally speaking, the reduction in bad debt throughout the year will continue to kind of pace, I think, our original forecast here. kind of had us getting a call 1.4, 1.5, 1.4 to 1.5% of revenue this year. And we ended, we're right about 1.8% today, and it'll kind of move down to call 1.2 to 1.3, average out to that 1.4. And then obviously the rent growth trajectory is really going to benefit us in the second half of the year.

Got it. And then as we move past supply, how are you thinking about the relative performance between the B's and the A's or the renovated B's?

In terms of relative performance of just rent growth or occupancy?

Yeah, rent growth. Yeah, mainly rent growth. But if you could touch on some of the demand trends that you might see as well.

Yeah, you know, we continue to see, we're predominantly a Class B, you know, property or portfolio. We continue to see really good demands for obviously the Class B product. You know, the value-added units or the units when they do go into the renovation program are pretty much always pre-leased. We really don't have, you know, kind of excess inventory on the value-added communities. You know, the Class A deals that we do have, they did compete a little more with some of the new supply that was delivered. But we still see, you know, demand trends picking up there. But the B continues to see just nice, stable demand.

Your next question is from the line of Jamie Fieldman with Wells Fargo.

Great. Thanks and good morning. Can you talk about costs on your redevelopment program and the potential impact from tariffs? How early do you lock in costs ahead of projects and how sustainable are your mid-single-digit returns on investment if we see costs move 10% higher or more?

Yeah, it's a great question. You know, for the vast majority of our costs in the renovation program, you know, obviously there's a good chunk of it that is labor to, you know, obviously do the actual turn. Some of the more, you know, product-heavy costs are in the value-add and in the actual vinyl flooring that we'll put in or in the appliances. A good chunk of the appliances come from manufacturers inside of America, so we don't necessarily have a huge tariff issue there, unless obviously they have tariff issues sourcing raw materials from non-U.S. countries. The vast majority of the vinyl flooring will either come from Vietnam or South Korea. And we've already locked in pricing for 2025 for a full year. So at this point, we're really not expecting any kind of really significant pressure on the value add. But that's where if there is issues in the tariff and trade world, that's where we at IRT will expect to see it. But as you can imagine, it's still very, very early to tell.

Paul Cecala, Okay, thanks for that and then just thinking more about the blend it looks like you're new and renewals are in line is slightly better than your March update. Paul Cecala, But more new leases took the blend down, can you talk about did you take back any more delinquent units that would have changed the blended occupancy. Paul Cecala, As you did your leasing and focus on your. Paul Cecala, Your focus on your leasing.

Overall, we've seen our delinquent units maintained. We did see a decrease of 50 basis points in our bad debt from year over year, and so we're anticipating that to continue to decrease to achieve guidance of 1.2%. So, we did have early terms that contributed to that mix, but it was relatively normal for the season.

Your next question is from the line of Linda Tesai with Jefferies.

Morning, Linda.

Linda, your line is open.

There's no response from that line. Yeah, we can move to the next address.

Your next question comes from the line of John Pawlowski with Green Street.

Thanks for the time. A few questions about the thought process and the assumptions underpinning the full-year revenue guide. I know it sounds like you're assuming supply comes down pretty substantially this year. Can you help frame your job growth assumptions for 2025, how that kind of compares to the job growth you saw across your footprint in 2024?

Yeah, I don't have the job growth assumptions right in front of me. I would say that, you know, some of the data points that we've talked about in the past where you have both obviously population and job growth per unit of new supply, over the last three years, you know, that ratio of kind of population growth to supply growth in our submarkets was I think 3.8 people for every new supply in the next three years. So 2025, 2026, 2027, that ratio is going to be roughly seven times. I do know that, you know, obviously when you look at the supply trends, you know, we delivered or in 2024, the deliveries were about 6% of existing stock in our sub markets. And in 2025, that's going to drop to about 2%. So the job growth and the population growth we think is just generally relatively steady with historical trends. It's just the supply is really dropping off.

Yeah, and I would add to that, you know, as we stated in the prepared remarks, that according to CoStar, there was a negative absorption in 2024 of 21%. And while nationwide 2025 is expected to have a 1.5% positive absorption, and while our sub-market specifically will be 8.5% positive absorption,

absorption so according to costar that indicates continued job growth and far far less new supply which is what we're we're seeing as we move through 2025. okay and on that point it'd be helpful just to maybe hear you talk through a few of the most heavily supplied markets right now you know the denver sorry the uh the rallies um the atlanta's and just Any statistics that you can point to to say, hey, this inflection point is happening right now. Rent spreads are about to leg higher. The exact numbers in any given quarter I'm less concerned about. It doesn't feel like the light is turning on in some of these heavily supplied markets. So any data points that give you confidence for this big reacceleration that seems to be underpinning the revenue guidance would be helpful to hear.

Sure. We see, you know, Charlotte and Colorado are going to continue to have some supply pressures throughout 24. And so, I'm sorry, 25. So we will be, you know, looking to outperform and maintain not only occupancy, but maximize revenue where we can. Atlanta and Raleigh, we've seen a positive new lease rent growth since January. And sorry, not positive new lease rent growth, but less negative. new leaf growth with a trajectory where it's becoming, you know, less and less every month. And I think that is starting to be a data point that shows the trajectory of the supply, you know, with the demand and the absorption rates increasing. So I think we'll continue to see that through the rest of 25 in Atlanta and Raleigh. Charlotte and Colorado will still be, you know, having pressures throughout 25.

John, just as a little aside, you know, with some specific numbers, in terms of supply growth, when you look at this picket market like a lamb, which is our largest market, you know, in 2024, the new delivery that occurred was about 6% of existing stock in our submarkets, not even just the overall, just in our submarkets. For 2025, CoStar estimates that to be 90 basis points, a significant fall off.

Your next question is from the line of Jamie Feldman, Wells Fargo.

Great. Thanks for taking the follow-up question. I just wanted to follow up on the expense side. You have two insurance renewals coming here in May and June. Thus far, we've seen declines in insurance premiums year to date from some of your peers. So, curious how you're thinking about the renewal in terms of your expectations and what's in your guidance.

then any other op-ex line items we should be thinking about where you could see some benefits here sure um good question you know uh we have to renew expense uh insurance renewals our property and casualty will renew on may 15th and our liability will renew on july 1st not june so um the still a little bit early on the property casualty and uh i don't want to obviously you know talk about you know too much specifics our guidance at this point assumed a 10 increase um for the for the year but we will we are expecting to generate a decrease in the premium um once once the the renewal is signed um so it's a little bit early but i don't want to give kind of too much you know direction in terms of the quantification of it yet until it's really you know firm uh the liability premium or a liability policy that will renew in early july we are expecting an increase. But overall, between both policies, it is expected to be a net decrease.

The liability expense is far smaller. Insurance premium expense is far smaller than the property and casualty. Correct.

Okay. So just to make sure I heard it right, you're assuming a 10% increase, but you think it'll be meaningfully lower, maybe even a decrease? Yes. Okay. That's nice. And then... Any other OptX line items we should be thinking about that you think are either trending in line with guidance or things might be changing, better or worse?

Yeah, I would say one of the items that, as I mentioned in the prepared remarks, that trended in the Q1 better than guidance was repairs and maintenance and turnover costs. We just had better retention than we would originally assume in guidance. That's obviously sticky rather than a timing thing, and that obviously will move and shake throughout the year as retention changes. And I would say the rest of the categories continue to kind of be in line with guidance. The big boy of real estate taxes, that is a TBD that we won't get the best majority of our assessments in until call at the end of June, early mid-July. So we'll have a lot more commentary for, obviously, you and the market in our July earnings call.

Your next question is from the line of Linda Tesai with Jefferies.

Hi, sorry about that earlier, and I might have missed this. So you exited Birmingham. Are there any other markets you would expect to exit by year end?

Yeah, at this point, no. Our dispositions, you know, guidance is currently, you know, complete. We're obviously always reviewing the portfolio, but there's no expected, you know, change at this very moment. And, you know, once there is an update, we'll be obviously happy to give it.

And then in terms of June and July being your highest expiration months, kind of any initial color you could give there?

In terms of leasing velocity? I mean, yeah, you're right. June and July are our highest expiration months. Obviously, Janice and the team are working expeditiously to try to, you know, drive leasing ahead of those expiration months, as I mentioned earlier. You know, here in the month of May, the net demand is 25% better this year than it was last year at this point. So we're excited about kind of where we are heading into the leasing season. And we're trying to continue to keep retention as high as we can to really offset any kind of negative new lease pressure or lease pressure in the back of the year so we can really take advantage of that waning supply.

As a reminder, if you'd like to ask a question, press star followed by the number one on your telephone keypad. Your next question is from the line of Mason Gall with Baird.

Thanks. Good morning, everyone. Could you talk about the blend difference between your Midwest? Morning. Could you talk about the blend difference between your Midwest and Sunbelt markets in general and then kind of how you expect that to trend throughout the year?

We're seeing as anticipated blends in the Midwest where, you know, anywhere between 2% to 3% based on seasonality. And then in our Sunbelts, we're starting to see positive directory on our blended from January through April, and we'll continue to see that through the rest of the year.

Thanks for that. And then on your acquisitions, I mean, you guys expect to acquire one and lease up and one stabilized. I guess going forward, do you have a preference for one or the other, or do you kind of see it as more opportunistic?

It's more opportunistic. You know, there are certain markets where we're looking to add exposure. But, you know, as I said before, we're always focused on doing or acquiring assets that will be accrued at the earnings in year one. I will add that everything in our pipeline, today is the values would be below replacement cost. So, you know, we think any acquisition, you know, will fare well, you know, over the next few years.

You have a follow-up question from the line of Linda Tassai with Jefferies.

Hi, thanks. I just want to ask, I know Class B is holding up a bit better, and that's the majority of your portfolio. Any sort of color around the delta between the performance of Class A versus B?

I apologize. You broke up at the beginning of the question. Would you mind just starting over again?

Sure. Class B is holding up better within your portfolio, which I understand is the majority. I was just wondering what the delta is in performance between Class A and Class B.

Yeah, I don't have the NOI kind of differences right now between the A's and the B's. I would say that the rental rate growth is certainly better in the B's. The blends in the first quarter on the B portfolio was about positive, call it 40 basis points, and the blends on the Class A, which is only 17 properties, was about minus, call it 80 basis points.

Thank you. This concludes today's call. We thank you for joining. You may now disconnect your lines.